Tag: Paseo de Gracia

Luxury Brands Compete For Space On Spain’s Golden Miles

19 November 2015 – Expansión

The war between the major brands for shops on the golden miles of Madrid and Barcelona is intensifying and it is becoming increasingly difficult to secure premises on these streets, where rents cost more than €230/m2/month.

Calle Serrano and Paseo de Gràcia have become the exclusive territory of the large fashion houses. In recent years, big names in fashion, accessories and jewellery have been taking over the best premises on the golden miles of Madrid and Barcelona and in 2015, boosted by the economic recovery, they have completely taken over these shopping streets, where average rents now cost €230/m2/month.

This year, more than half of the operations recorded in the commercial districts of Madrid and Barcelona have involved fashion houses and jewellery firms. Eleven operations have been completed on Madrid’s golden mile, compared with fifteen in Barcelona, which has welcomed 12 new brands to the city, according to the latest report by Ascana.

Polarisation

“Desirable streets are getting increasingly better, whilst the worst streets are still suffering from the crisis”, says the founding partner of Ascana, Eduardo Rivero. The growth in tourism and the beginning of the recovery for local consumers has spurred on the large brands to position themselves in the best locations.

According to Rivero, the arrival of Prada, Louis Vuitton and Versace, and the expansion of Gucci, on Calle Serrano, is enticing the other luxury brands to follow suit. “We are talking about more affordable luxury” says the consultant – “the high-end luxury firms, such as Chanel and Hermés, are staying put on Calle Ortega y Gasset”.

Increasingly, the Paseo de Grácia is being split into three sections: luxury brands at the top (of the street), mid-range brands in the middle section and more affordable brands at the bottom end (closest to Plaza Cataluña).

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Azca & Diagonal: The Most Sought-After Office Space In Spain

17 July 2015 – Expansión

According to the consultancy firm JLL, the scarce supply and improving economy will cause office rental prices in Madrid and Barcelona to rise by more than anywhere else in the EMEA region over the next five years.

Specifically, the consultancy expects that office rents will rise in Madrid by 6.2% each year on average, from €25/m2/month in 2014 to €34.5/m2/ month in 2019. Meanwhile, rents in Barcelona will increase by 5.3% per year, to €23/m2/ month by the end of 2019. The highest rents will be seen in the prime areas, i.e. in the central business districts: Azca in Madrid and Avenida Diagonal (between Francesc Macia and Maria Cristina) in Barcelona.

In fact (…) prices in Barcelona will not only rise on Diagonal, they will also increase on Paseo de Gracia. Overall, rents increased by 6% in Q2 2015 in Barcelona, to reach €19/m2/month on average in those two areas.

According to JLL, only 15,000 m2 of office space is currently available on the best section of Diagonal, out of a stock of around 275,000 m2 in that area, which represents an availability rate of around 5%, a figure not seen since 2008.

In fact, between 2010 and 2011, large companies such as Axa, Unilever and KPMG decided to leave the business district and move to more peripheral areas. Axa left ‘La Illa’ to move to WTC Almeda Park in Cornella, where it rents 9,000 m2; KPMG was the pioneer in moving to the new Plaza Europa business district in 2010, where it rents 6,000 m2 in Torre Realia BCN. And in 2011, Unilever moved to the Viladecans Business Park, where it rents 7,000 m2. (…).

More office space is available in Madrid: up to 46,458 m2. Moreover, that figure is expected to increase to almost 108,000 m2 in the next two years, as almost 23% of the total surface area of 475,784 m2 in the area becomes available. (…). This is partly due to BBVA’s upcoming move to its new headquarters in the neighbourhood of Las Tablas – the bank currently occupies the building at Castellana, 81, where it will leave a space measuring 24,000 m2, which is expected to become available in Spring 2016. Furthermore, KPMG is going to move from Torre Europa (pictured above) to Torre Cristal (in the Cuatro Torres complex) and will free up around 21,000 m2 of space at Castellana 89 from next year. Finally, space will become available in Torre Ederra (Castellana, 77), recently acquired by GMP, which is going to undertake a complete renovation of the property, to be completed at the beginning of 2017.

Until then, 9.9% of the total office space in Madrid is immediately available. Most is located in Torre Titania (on Calle Raimundo Fernández Villaverde, 65), which accounts for 34% of the available space. The remainder is spread across other office buildings in the area, including the Masters I and II buildings (Calle General Perón, 38), the Mapfre building (Calle General Perón, 40) and the Alfredo Mahou building (Plaza Manuel Gómez Moreno, 2). (…).

Original story: Expansión

Translation: Carmel Drake

Versace Returns To Madrid’s Golden Mile

8 June 2015 – Expansión

Opening on Serrano / The luxury brand returns to the capital’s most exclusive shopping district, after closing its first store there a decade ago.

One of the leaders in the luxury fashion industry is returning to Madrid. The Italian firm Versace has just signed the lease for a store on Madrid’s exclusive Calle Serrano. The opening of the shop means the return of the firm, which closed its first stores in Madrid and Barcelona in 2005.

The company led by Donatella Versace has already taken the first steps in its return to the Spanish market with the opening of a store in Puerto Banús (Marbella) and on Paseo de Gracia, 85 in Barcelona.

Now, it has just signed the lease for a shop located on Calle Serrano, 16, where its neighbours will include other luxury brands such as Longchamp, Michael Kors, Louis Vuitton and Loewe. (…)

The store is currently being refurbished following the departure of its previous tenant, the Catalan firm Custo. Prior to that, it was occupied by another Spanish fashion group, Hoss Intropia. Following the refurbishment, which has been commissioned by the family office that owns the building, Versace will have a store with more than 500 m2 of space in the most exclusive shopping district of Madrid. As such, experts forecast that the firm will pay a rent of around €1 million per year.

The arrival of Versace is not the only big move happening on the city’s Golden Mile over the next few months. The firm Macson, which specialises in menswear, will take over from Massimo Dutti at Serrano, 17. Macson, which is headquartered in Madrid, will become the tenant of the store measuring 550 m2, after Inditex’s high-end brand moved to number 46. The change at that address (Serrano, 46) will be from one brand of Amancio Ortega’s group to another, since Zara used to lease the property, until it opened its flagship store at number 23, Calle Serrano. The opening of that property, a year ago, marked the launch of Zara’s first flagship store in Spain, following the opening of several flagship stores around the world, including in New York, Milan and Shanghai. Another Spanish firm, Mango, is also preparing to open its own flagship store on one of Spain’s most expensive retail streets.

Availability

“The completion of the refurbishment work has given way to frenetic change, with 24 new store openings in 2014 alone, and with very limited levels of availability, which has caused rents to increase, to reach €220/m2/month”, explain sources at Ascana.

There are currently three stores in the same building (Calle Serrano, 7) that are awaiting tenants. In total, the three premises have a surface area of 10,000 m2, which will undoubtedly be snapped up soon given the furore currently surrounding Madrid’s Golden Mile.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Amancio Ortega’s RE Jewels In The Heart Of Madrid & BCN

26 March 2015 – Expansión

The largest shareholder of Inditex has an extensive real estate portfolio that includes properties and retail stores on the two most desirable streets in both cities.

They are the most sought-after streets in Spain for any real estate investor. On the one hand, Paseo de Gracia, in Barcelona, the star shopping street in the Catalan capital. On the other hand, the Paseo de la Castellana, in Madrid, an object of desire for any investor and a prime office location. As such, both have piqued the interest of Amancio Ortega, who owns more than ten buildings on the two thoroughfares.

Through Pontegadea, the company that the founder and majority shareholder of Inditex channels his investments through after closing his Sicavs, Ortega has purchased six buildings on the Catalan avenue and another five on the Madrid street.

In the case of the Paseo de Gracia, the most recent acquisition was made last year when Ortega purchased an office building located at number 1 on the street, on the corner with the famous Plaza Cataluña, for €44 million. This space, which has been leased to Banesto until now, will be converted into an Iberostar Hotel. A few months earlier, he acquired the commercial premises in the same building for €80 million, which are leased to Apple (see picture above). That US multinational is not Ortega’s only illustrious tenant; others include Fnac, Baker & Mackenzie, Burberry and Google.

In March 2012, Pontegadea acquired another building also on the Paseo de Gracia. In that case, Ortega’s company paid Sacyr €53.5 million for the building located at number 56. Measuring more than 9,000 square metres, it is leased to the British textile manufacturer Burberry. The Inditex owner is also the landlord of the building at number 93.

Madrid

The purchases made in the last decade have made Amancio Ortega one of the largest property owners on Madrid’s main thoroughfare: the Paseo de la Castellana. The owner of Zara joined the select club of property owners in that area in 2004, when he acquired number 92 (that same year he made a joint purchase with Metrópolis of an office building on the Paseo de Gracia, 16, which was converted into luxury housing). On the Castellana, Ortega also owns number 35, which he acquired in 2005; and number 79, the former headquarters of Axa, which he renovated to create a new office building with a shopping area, now leased to Fnac and Habitat.

But, undoubtedly, the jewel in Ortega’s crown in Madrid was acquired at the end of 2011, when he signed an agreement with FCC to purchase the Torre Picasso. He paid €400 million for the skyscraper that sits in the heart of the city’s financial district, just a few metres from the Paseo de la Castellana – a record figure for a single building, second only to the €815 million that the then Caja Madrid invested in the Torre Foster.

Nevertheless, it was not the first time that Pontegadea had paid so much in a real estate transaction. At the end of 2007, Amancio Ortega paid €458 million to Santander for the acquisition of ten buildings located in several Spanish cities, which included Castellana, 24 and Paseo de Gracia, 5.

These two great Spanish streets are just an example of Ortega’s extensive property holdings, which also include buildings leased to Inditex companies, such as for example Serrano, 23, in Madrid, which is leased to Zara. In the last full financial year (2013), Pontegadea’s assets were valued at €4,519.5 million and they generated a profit of €93.3 million, compared with €70.5 million a year earlier.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Calle Serrano: The Most Expensive Street In Spain

4 March 2015 – Cinco Días

Tenants now pay rents of €32 per square metre on the exclusive Madrileñian shopping street

The most expensive rents in Spain are paid on Calle Serrano in Madrid (€32 per square metre), followed by the Paseo de Gracia in Barcelona (€29 per square metre).

According to a study conducted by TecniTasa, after these iconic streets in Madrid and Barcelona, the next most expensive rents in Spain are paid in Pamplona, where tenants are charged more than €25 per square metre.

Rental costs in Santander, Marbella and Cádiz now exceed €17 per square metre, and so these cities replace La Coruña, San Sebastián and Bilbao in the list of most expensive rental prices.

By contrast, the report indicates that the lowest rents are paid in the cities of Castellón, Elche, Huelva, Almería, Granada and Torrent, in Valencia, where the cost per square metre amounts to less than €2 per month.

The study concludes that house rental prices are continuing their downward trend in Spain, however these decreases are more significant in the more expensive areas, whilst the prices in the cheapest neighbourhoods are showing slight increases in some cities.

Rental housing on one of the iconic streets of cities such as Madrid, Barcelona, Pamplona, La Coruña, San Sebastián and Bilbao costs more than €2,000 per month.

This data contrasts with the values charged in the cheapest neighbourhoods of Alicante, Elche, Almería, Castellón, Granada, Huelva and Torrent, where it is still possible to rent a home for less than €200 per month.

Original story: Cinco Días

Translation: Carmel Drake

Investment In Housing Returns To Barcelona After 7 Years

18 February 2015 – El País

The housing market is the last sector to emerge from the crisis. Nevertheless, investment returned to the residential segment last year, after seven years of sluggishness towards undertaking significant projects in the Catalan capital. In addition to the purchase of portfolios by vulture funds, nine major acquisitions were also recorded in Barcelona, corresponding to 55,095 square metres, according to the real estate consultant CB Richard Ellis. These developments, most of which are aimed at high-end clients, showed a move away from the traditional prime (residential) area – Sarria-Sant Gervasi – towards the neighbourhoods of Eixample, Ciutat Vella and Diagonal Mar.

The Vice President of CB Richard Ellis, Enrique Martínez-Laguna, described 2014 as a “historical” year because the volumes of investment amounted to €10,463 million across the whole of Spain, even higher than the levels recorded in 2007, the year in which most capital was invested. The Director of the consultancy firm in Barcelona, Anna Esteban, highlighted that property prices have fallen since then, and so more transactions were recorded in 2014 than in 2007. The consultancy firm expects investors’ appetite to continue this year, to the extent that “we will begin to see cranes (appearing on the horizon)”, says Martínez-Laguna.

The Catalan capital destroyed 90,000 square metres of office space in 2014

But the map of the city has not only changed in terms of the construction of housing. In total, 90,000 square metres of office space were destroyed in the city centre in 2014 alone. Buildings were converted or will shortly be converted into hotels and homes.

Changing landscape

For example, the Paseo de Gracia, has now become a residential and retail area. And something similar may take place on the Diagonal following its renovation. “There are also two buildings, at number 10 Francesc Macia and number 111 Paseo de Gracia, whose premises could be converted into the entrance of what may become a new open-air shopping centre” says Martínez-Laguna. At the same time, some of the buildings in the 22@ district are generating very similar rents to those being paid for other properties in the traditional business district.

The current rental price in the best areas of Barcelona amounts to c.€17.75 per square metre, down from the peak of €28/m2 recorded in 2007. Moreover, the consultancy firm considers that these rents have now bottomed out and will grow by 30% over the next two to three years.

Original story: El País (by Lluís Pellicer)

Translation: Carmel Drake